Najib told KWAP to expedite SRC loan

NAJIB TRIAL | Former prime minister Najib Abdul Razak had urged Retirement Fund Incorporated (KWAP) to expedite the approval of a RM2 billion loan to SRC International Sdn Bhd, the Kuala Lumpur High Court heard today.

KWAP vice-president of legal and secretarial affairs Azlida Mazni Arshad testified that he made the request through then KWAP chairperson Wan Abdul Aziz Wan Abdullah, who was also the Treasury secretary-general at the time.

Following this, KWAP's then CEO Azian Mohd Noh informed the fund's special investment panel, said the witness who minuted the meeting. KWAP is the pension fund for government employees.

"I can confirm that the CEO had told the (panel) that the prime minister had informed KWAP's chairperson to expedite the approval process for this loan and that the amount RM2 billion would suffice.

"Page two in the meeting's minutes was referred. I hereby identify the meeting's minutes dated July 19, 2011, and confirm the documents," she told the court during examination-in-chief by DPP Ishak Mohd Yusof.

Earlier testimonies had established that SRC International had secured a RM4 billion loan from KWAP in two separate tranches.

When Ishak attempted to establish why the investment panel had to expedite the approval process, Azlida said the panel had to abide by orders.

The court also heard from Azlida that during the July 19 meeting, the special investment panel had agreed that a RM2 billion loan to SRC International was too big an amount.

The main concern was that SRC International only had a paid-up capital of RM2.

"Thus, the panel members had (initially) agreed to only grant a loan of RM1 billion in accordance to the initial proposal paper that was discussed during the investment panel meeting on July 5, 2011.

"They agreed to consider providing the loan directly to 1MDB, which is fully owned by the Finance Ministry Inc instead of SRC as 1MDB [...] is supervised by the Finance Ministry Inc."

She said the panel was concerned about risks related to SRC International's investment plans, especially in terms of its ability to service the loan.

According to her, the panel had also questioned the ability and credibility of SRC International's management in its investment in natural resources which required specialist expertise.

"After hearing and deliberating the views of all panel members, the meeting then decided to approve the RM2 billion loan to 1MDB based on KWAP's support for the government's strategic initiatives.

"(This was) with the condition that the loan was to 1MDB and based on the government's guarantee, or that KWAP provides the loan directly to the government as the borrower and the government will loan the amount to 1MDB."

Day 16: KWAP panel had reservations about loaning SRC RM2b - witness

Executive tried to limit KWAP exposure to RM1b

Day 14: RM4b loan is the largest I've seen KWAP give, witness insists

Najib signed the gov't guarantee for KWAP loan to SRC